Mahindra Holidays and Resorts

Mahindra Holidays and Resorts

United Phosphorus, Mahindra Holidays, Reliance Industries

United Phosphorus, Mahindra Holidays, Reliance Industries

Praj Industries, IPCA Labs, Motherson Sumi, Mahindra Holidays and Resorts

Praj Industries, IPCA Labs, Motherson Sumi, Mahindra Holidays and Resorts

Annual Report - Mahindra Holidays and Resorts - 2009-2010

MAHINDRA HOLIDAYS AND RESORTS INDIA LIMITED

ANNUAL REPORT 2009-2010

DIRECTOR'S REPORT

Dear Shareholders

Your Directors are pleased to present their Fourteenth Report together with
the audited accounts of your Company for the year ended 31st March, 2010.

Mahindra Holidays and Resorts

Mahindra Holidays and Resorts

Mahindra Holidays and Resorts

Shareholders with a long-term perspective can retain their holdings in Mahindra Holidays & Resorts, the leading vacation ownership provider in the country. With a business model highly dependent on the domestic consumption story, the slow uptick in the economy suggests improving prospects for the company. A strong brand equity, multiple sales channel and unique revenue model further fortify its investment appeal.

However, at the current market price of Rs 434, the stock appears fully priced, trading at about 30 times its likely FY-11 per share earnings. While not having any strict comparables and being the market leader do lend room for premium valuations, it appears fairly valued at the current price. Near-term upsides, therefore, may be limited.

Unique model

In the business of vacation ownership, Mahindra Holidays' revenue model entails an upfront payment of the ownership fee with a recurring annual maintenance fee component thereafter.

This provides for higher visibility and a more stable stream of revenues compared to that of pure hospitality players. And unlike the asset-heavy hotel industry, the company does not operate on a capital-intensive business model. It adds to its assets only against the payment received on member additions. As a result, it enjoys strong cash flows and has near-zero debt on its books.

Mahindra Holidays, however, sells a significant majority of its memberships through financing schemes (monthly instalment options) and even securitises a portion of its receivables. While financing the vacation ownerships helps add to its member count, it also complements the revenue stream by way of interest income.

The risk of default is low here considering the overall profile of its member base — consisting of mostly employed professionals who are reasonably sound financially. And since MHRIL continues to hold the assets, the impact of defaults, if any, would only be negligible.

Besides, that it has so far managed to operate with near negligible rates of default lends confidence. That said, it still remains to be seen how the company would manage member additions in an increasing interest rate regime.

High interest rates tend to curb discretionary spending by consumers and so can pose a threat to member additions. This is especially relevant in the case of MHRIL since its business operates on the difference between the interests its pays to banks and the interest rate in-built into the EMI schedule of its members.

Growing membership enrolments — which is the key driver for future growth — at historical growth rates may, therefore, not be as easy (34 per cent compounded rate over the last four years).

Financials

Even though the company has a diverse source of income, its key contribution still comes from member additions only. Of the total membership fee charged, the company books nearly 60 per cent of that in the same year, while the rest is spread over the life of the membership (typically 25 years for the flagship Club Mahindra product) as entitlement fees (annuity income). It also charges an annual subscription fees over the life of the membership.

Over the last four years, Mahindra Holidays has grown its revenues and profits at a compounded annual growth rate of about 40 per cent and 76 per cent, respectively. In the same period, both its operating and profit margins have expanded significantly to about 34 per cent and 18 per cent, respectively.

For the nine-months ended December 2009, the company managed to grow its revenues by about 18 per cent. Profits surpassed last fiscal's full year earnings helped by a slew of cost-control measures, which helped expand the operating margins by about 4 percentage points to 38 per cent.

The company, however, is required to spend considerably towards sales and marketing exercises (its largest cost component), as member additions hold the key to its growth.

While bringing down the sales and marketing expenses last quarter helped it better its operational performance, it may pose a threat to member additions if the cost component is brought down drastically. This cost component therefore may have to be monitored vis-à-vis member additions in the coming quarters.

But to its credit, MHRIL enjoys a fairly strong brand loyalty; over 35 per cent of the vacation ownerships sold in 2009 came through member referrals.

Health check since IPO

The company had raised roughly Rs 177 crore through its public issue in June last year for funding the proposed addition to its room inventory (capex to extend up to FY11).

As against 1,105 rooms in FY-09, the company had, as of December 2009, created an inventory of 1,403 rooms.

Member additions in the nine months from FY-09, however, have been lower than its yearly average, growing by about 17 per cent; it now has 109110 members as against 92,825 vacation owners in FY-09.

The member per room ratio too has improved, decreasing from 84 in FY-09 to 78 members per room now. And with average occupancies hovering around 75 per cent, the proposed addition to room inventory will further help the spread. It plans to expand its property in Coorg, Ooty and Ashtamudi and set up of new ones in Tungi and Theog.

via BL

Mahindra Holidays and Resorts

Mahindra Holidays and Resorts

Mahindra Holidays & Resorts to debut on BSE, NSE on 16 July 2009

The IPO was subscribed nearly 10 times

Mahindra Holidays & Resorts India (MHRIL) will debut on the secondary equity markets in India on Thursday, 16 July 2009. On NSE, the stock will be listed under the symbol ‘MHRIL'.

MHRIL had priced its initial public offer (IPO) at Rs 300 each. The IPO had got strong investor response. It was subscribed nearly 10 times. The issue closed on Friday, 26 June 2009.

The post-issue equity capital of the company is Rs 84.22 crore. Face value per share is Rs 10.

MHRIL runs the shared vacation home business, Club Mahindra Holidays. The IPO proceeds will be utilised in expanding current properties and adding five new properties at Kumbalgarh in Rajasthan, Kadambakkam in Tamil Nadu, Binsar in Uttaranchal, Theog in Himachal Pradesh, and Tungi in Maharashtra.

The company's net profit fell 5% to Rs 79.80 crore on 11% rise in sales to Rs 393.19 crore in the year ended March 2009 over the year ended March 2008.

Grey Market Premium - Excel Infoways, Mahindra Holidays, NHPC, Adani Power

Mahindra Holidays 300

17 to 20

Excel Infoways Ltd. 80 to 85

4 to 5

Adani Power 110 to 130 (Approximate)

13 to 15

NHPC 15 to 20 (Approximate)

3 to 5

Mahindra Holidays likely to list on July 16th

Check your Allotment Status

Grey Market - Adani Power, NHPC, Mahindra Holidays

Grey Market Premiums of forthcoming IPOs

Prices in Bold are the current grey market premiums



Mahindra Holidays 300

25 to 27

Excel Infoways Ltd. 80 to 85

Discount

Adani Power 110 to 130 (Approximate)

20 to 25

NHPC 15 to 20 Approximate)

4 to 5

Grey Market Premium - Adani Power, NHPC, Mahindra Holidays, Excel Infoways

Mahindra Holidays 300

25 to 27

Excel Infoways Ltd. 80 to 85

Not Available

Adani Power 110 to 130 (Approximate)

20 to 25

NHPC 15 to 20 (Approximate)

4 to 5

Latest IPO Grey Market Premiums

Mahindra Holidays 300


25 to 27


Adani Power 110 to 130 (Approximate)


20 to 25

NHPC 15 to 20 (Approximate)


4 to 5

Grey Market Premium - NHPC, Adani Power, Mahindra Holidays

Mahindra Holidays 300 30 to 32

Adani Power 110 to 130 (Approximate) 27 to 30

NHPC 15 to 20 (Approximate) 5 to 7

Grey Market Premium- Adani Power, NHPC, Mahindra Holidays

Mahindra Holidays 300

30 to 32

Adani Power 110 to 130 (Approximate)

27 to 30

NHPC 15 to 20 Approximate)

5 to 7

Grey Market Premium - Adani Power, Mahindra Holidays

Mahindra Holidays 300

Premium - 25 to 30

Adani Power 110 to 130 (Approximate)

Premium 30 to 35

IPO Grey Market - Mahindra Holidays, Adani Power

Adani Power


110 to 130 (Approximate)


30 to 35




Mahindra Holidays


275 to 325


20 to 24

Grey Market Premium - Adani Power, Mahindra Holidays

Mahindra Holidays 275 to 325


22 to 25 (Seller)

Rishabhdev Techno 29 to 33


5 to 7

Adani Power 110 to 130 (Approximate)


30 to 35

Mahindra Holidays Grey Market Premium Drops

Mahindra Holidays


275 to 325


22 to 25

Rishabhdev Techno


29 to 33


5 to 7

Mahindra Holidays & Resorts India IPO receives solid response

Mahindra Holidays & Resorts India initial public offer was subscribed 9.74 times on the last day of subscription today as per the data on NSE website at 17:00 IST. The issue which opened for subscription on 23 June 2009 got bids for 9.02 crore shares as against 92.65 lakh shares on offer.

The company's 92.65 lakh public issue represents 11% of the post-issue paid up capital. The IPO price band is Rs 275-Rs 325.

Mahindra Holidays & Resorts India runs the shared vacation home business, Club Mahindra Holidays. India's largest tractor maker by sales Mahindra & Mahindra holds 93.64% in the company.

The IPO proceeds will be utilised in expanding current properties and adding five new properties at Kumbalgarh in Rajasthan, Kadambakkam in Tamil Nadu, Binsar in Uttaranchal, Theog in Himachal Pradesh, and Tungi in Maharashtra.

Mahindra Holidays & Resorts India, a unit of Mahindra & Mahindra, had raised nearly Rs 120 crore by selling 2% stake to State Bank of India and 1% stake to Jacob Ballas India Fund in February 2008. The transaction had taken place at Rs 479 a share.

The company's net profit fell 5% to Rs 79.80 crore on 11% rise in sales to Rs 393.19 crore in the year ended March 2009 over the year ended March 2008.